Diageo maintains guidance as operating profit rises 11%; increase share buybacks

Writer, Stock Market Wire
Thursday, January 31, 2019 - 07:29

Diageo said Thursday first-half operating profit saw double-digit percentage growth as higher sales of its premium brands offset the impact of rising costs and a stronger pound. The company also pledged to increase its share buyback programme.

For the six months ended 31 December, reported operating profit rose to 11% to £2.4bn and net sales rose 5.8% to £6.9 billion. Organic operating profit grew 12.3%

All regions contributed to broad based organic net sales growth, up 7.5%, with organic volume up 3.5%, the company said.

Net cash from operating activities rose £356m to £1.6bn for the half compared to a year earlier, and free cash flow rose £3.17m to £1.3bn.

The interim dividend increased 5% to 26.1p a share and the approved an incremental share buyback of £660m, taking the total programme up to £3.0bn for the year ending 30 June 2019.

The drinks maker left its outlook unchanged.

'This half has benefitted from some one-time and phasing gains in both organic net sales and operating profit, and therefore we continue to expect to deliver mid-single digit organic net sales growth for the year and to expand operating margins in line with our previous guidance of 175 bps for the three years ending 30 June 2019,' the company said.


Related content

US trade war extends to European shores

Author: 

Last week the World Trade Organisation (WTO) gave the US the green light to impose billions of dollars of tariffs on European companies in retaliation for more...

Thu, 10/10/2019 - 00:00


Know your fund: what’s inside Lindsell Train Global Equity?

Author: 

When you think of good, dependable investments to buy and forget, a fund from Lindsell Train may spring to mind.

Its most popular one, Lindsell...

Thu, 26/09/2019 - 00:00


Broker Forecast - Deutsche Bank issues a broker note on Diageo PLC

Deutsche Bank today reaffirms its hold investment rating on Diageo PLC (LON:DGE) and raised its price target to 3650p (from 3500p).

Broker Forecasts data provided...

Fri, 20/09/2019 - 08:40


Diageo announces in line trading ahead of AGM 2019

Ivan Menezes, Chief Executive, commented:

'Fiscal 20 has started well as we continue to build on the momentum and consistent progress we are making in...

Thu, 19/09/2019 - 07:46


SSE offloads retail arm and Wetherspoons profit disappoints

“The pound looked lively heading into the weekend with a 0.67% gain against the US dollar to $1.2415. London-listed companies with lots of overseas earnings...

Fri, 13/09/2019 - 09:29